Tuesday, November 5, 2013

Not much to say here. I'm not getting motivated to write and I need to reboot. I've got some things in my life to get sorted out. For the few of you who have commented on this blog, thanks a lot for your support. It meant a lot.

Saturday, October 26, 2013

We had a pretty decent show tonight. And there was a lot that was discussed that requires some counter messaging, as Nawaz put it. So it's time to get into it.

Al Sharpton: The Republicans are obfuscating the issue by saying ObamaCare has failed because the website failed. Getting people insured is the objective, not delivering a great website.

There are multiple things wrong with spin. The PPACA was not implemented to give uninsured people insurance, full stop. The PPACA was sold as a measure to give uninsured people insurance in a cost effective manner that would not disrupt the rest of the insurance and labor market. On that score, the verdict is leaning towards failure and quite possibly disaster.

Before the business mandate was suspended a year, many firms were in the process of pushing full time hires to part time positions and dumping the part time employees onto the healthcare exchanges. The Administration changed the requirements on the website contractors because they didn't want people to see the unsubsidized prices of the insurance plans. The subsidies in the plans are tremendous and, in the final analysis, it will cost taxpayers a lot more than the rosy projections that the CBO was forced to come up with.

But the main objective for Democrats is to insure the uninsured, with cost as a secondary or tertiary concern. And the entire plan is predicated on young middle class wage earners subsidizing the poor and the old. The insurance plans have been working under that assumption. And if the first year's enrollment is poor and the young workers decide to forgo insurance and pay the fine, premiums will rise substantially in the second year.

That increase in premiums will force increased subsidies or force the poor and the old out of the system. It certainly won't get the young into the system. This endeavor is either going to cost taxpayers a far larger sum than they were told in the beginning, or it will end in failure.

Michael Moore: The "internet company" hired to create the website is an incompetent Canadian company that got fired by the Canadian government. Is there any wonder that they screwed this up?

Speaking as a software developer that works in an internal IT consultant in a media company, Michael Moore's comments were infuriating. Because the way he dismisses the "internet company" (his own words) while completely shielding the Administration from blame underscores how thankless a job IT is.

When I explain my job to friends and strangers, I'm fond of reducing IT to a very simple problem: moving information from point A to point B. That is the whole of IT, the transfer of data from one endpoint to another in a readable format.

The reason why that job gets hairy and complicated and why IT workers get paid so well is because every endpoint has that data stored in different formats (Excel documents, flat text files, various database solutions [SQL Server, Oracle, MySQL, DB2, Mongodb, etc], , physical documents) and in different schemas (the way the information is presented). All of it requires an enormous amount of development, configuration, debugging, and testing. On top of that giant pile of suck is the coordinating effort. Project managers and business analysts have to suss out requirements, limitations, and then get the team moving in the same direction.

IT is strictly a business cost. It's overhead. The value of IT is related directly to how much it helps out the non-technical people using the solution. So to wring out as much productivity as possible, customers want to impose deadlines which may or may not be realistic. And government is the absolute worst customer possible. Because deadlines are based in political terms and not terms dictated by reality or feasibility.

People in government are not tech savvy. Everything gets contracted out because the General Schedule and the various regulations that govern full time employment in the Federal government does not allow most IT developers to get paid what they are worth. And when customers make abrupt changes to the specifications, that just
triggers an additional round of development, configuration, debugging,
and testing. The end result is that there has never been a bigger knowledge/communication gap between the customer (the Federal government) and the IT shop.

The Congressional hearings has been a classic postmortem analysis of an IT clusterfuck. The people representing the IT consultants blame other IT consultants while taking great care not to blame the customer (because the customer is always right). When you're developing a website that's supposed to gather data from the IRS, DHS, HHS, not to mention all participating insurance companies in each of the 30+ states that have opted for the Federal exchanges, it takes a lot of time to create a seamless experience that integrates all of these disparate parts.

And then you have to take in account that government regulations make everything 10 times harder and complex and it's no wonder that the website has been absolute dogshit. Right now, the administration is telling the public that the problem will be fixed by November 30. That is an impossible deadline. And the likely result is that the vast majority of applications on the website will be rejected by the companies underwriting the insurance.

Richard Dawkins: Religion sucks.

Bill Maher: Agreed. And we should get that stuff outta the schools too. Evolution should not be considered a theory. It's fact.

While I think the US will get less religious over time, it's still worth noting that a great majority of the country is still very religious. And, to be perfectly honest, this is a bad fight for progressives to pick. Teaching evolution isn't necessary. Our kids are failing in reading comprehension, writing skills (which is closely related to your ability to read), and basic math. Our workforce will get less and less competitive if these trends continue.

Progressives are better off pushing for better reading, writing, and mathematical standards. That will attract support from all corners of the political spectrum. But emphasizing the schism between certain religious sects and school curricula is nothing but an exercise in ego stroking.

Wednesday, October 16, 2013

I know I'm late with this. Had a real busy weekend and only just got around to watching it. That was followed immediately by gnawing regret over having done so, because I knew what kind of show I was getting into (Chris Matthews was on the panel) and proceeded to have my expectations met. But there were plenty of talking points that need to be addressed.

Maya Wiley: You either need higher minimum wages or welfare to combat poverty.

A high minimum wage doesn't combat poverty at all. It actually pushes more people into poverty because it pushes unskilled labor out of the workforce as labor gets replaced by automated processes and machines. Many restaurants are already switching over to tablet interfaces to handle ordering, displacing a job that could have gone to a live person operating a cash register.

There is a clear, substantive impact on teen and black employment rates when you raise the minimum wage. It's clearly bad economics, but because people try to conflate the statutory minimum wage with the moralistic concept of a living wage, it gets traction in progressive circles as a real policy proposal. The origin of the minimum wage actually goes back to a time when unionized labor sought to shut blacks and non-unionized laborers out of the workforce.

Sidebar: Welfare is important.

Wiley rightly took the Michigan Legislature to task when she criticized a law that rolled back funding for the EITC. I'm in favor of the EITC because it's a market oriented policy solution that does address the issue of poverty and combines it with a work requirement. If you don't work, you don't get any EITC.

There are real issues with the EITC, most notably the steep effective marginal tax rates that people on the EITC face when they're close to the phaseout levels. For hourly wage workers, there is a huge incentive not to put in extra hours because effective marginal rates can approach 90%. But fixes for that issue are relatively trivial.

Conditional welfare attached to socially/economically productive activities is the best kind of welfare. And welfare is necessary in a modern country. Therefore we should have more programs structured like the EITC.

Maya Wiley: Corporations should pay their fair share in taxes. Verizon made over 40 billion in profit and paid zero taxes!

The Verizon example is actually completely false. You can go on their website and look at their financial statements and see that, actually, last year, they made about 10 billion in profit and netted a net 660 million dollar benefit in taxes. But the year before, they paid 285 million in income taxes and the year before that they paid 2.47 billion in taxes. Tax liabilities swing wildly for huge companies because they can claim losses in one year as a credit in another. Other things like certain capital investments are also favored by the tax code and can even result in a net positive benefit.

Wiley is trying to sound authoritative on an issue which she knows nothing about. That 40 billion figure was thrown out to make her sound smarter (the corollary to the Kelvin principle: "when you cannot express [your argument] in numbers, your knowledge is of a meagre and unsatisfactory kind") and the tax argument is only true for the most recent annual report.

Corporations are a perennial punching bag on the left, but it'd be better if they could cite real examples of corporate abuse instead of attacking legitimate actions just because they disagree with the tax code.

Bill Maher: The sequester cut Federal spending across the board by 5%. The President has done nothing but cut spending.

Actually, that 5% "cleaver" only applied to Federal discretionary spending, which only accounts for 34% of the Federal budget. So in actuality, the sequester cut total spending by just 1.7%. And almost all of that spending "cut" is actually a cut in the baseline spending increase. From 2012 to 2013, total spending increased by 95 billion dollars.

The continuing resolutions that fund the government operate by perpetuating the last budget forward, which has a statutory requirement to grow every fiscal year to account for population and economic growth. So even if we cut spending by 50 billion dollars a year, the Federal government will still spend more this year than it will last year.

The Republicans are calm because markets are calm. The 1 month Treasury bill has skyrocketed in yield, but the 3 month is absolutely tranquil. If markets sense that a deal won't actually get made, they'll panic and the Republicans will panic right alongside them as they start getting deluged by angry citizens demanding to know why they didn't get their Social Security check.

Oliver Stone: The bomb didn't need to be dropped over Japan.

Well, LeMay could have continued firebombing Japan (which killed vastly more Japanese than the two bombs combined) for weeks on end in preparation for a ground invasion that was estimated to have hundreds of thousands of American casualties (seriously, the US military actually made hundreds of thousands of Purple Hearts in advance; the current ones we give out now are out of that stash that was made in WWII). But we had the bomb and that turned out to be a much better call for all parties involved.

Observations:

1. Chris Matthews continues to bulldoze over the rest of the panel. I really wish he'd stop coming on the show, because he's rude, obnoxious, loud, and utterly smug. It's bad enough that he has a daily show, he doesn't need to pollute another show.2. That Jim Glassman dude looked and talked exactly like a GOP doppelganger of Joe Biden. And I'm not saying that just because they're both two old white males.

3. Carol Roth needs to improve her on-the-fly debate skills, because she's obviously an intelligent and knowledgeable person with a lot to say. She couldn't effectively contribute to the conversation because she's too busy trying to craft an argument in her head. You could literally see the gears whirring.

Thursday, October 10, 2013

The Capitol is in shambles. Republicans and Democrats can't agree on anything. They're two drivers playing a dangerous game of chicken, with the fragile economy along for the ride. Pick up the newspaper, or go to a news channel. Both parties are furiously spinning everything they can to get public sentiment on their side in a battle that will lay waste to the fortunes of the American republic. This is the current state of affairs in Washington DC.

That is the current state of affairs according to a hyperbolic media and its easily susceptible audience. The reality is far more mundane. Both parties are showboating right up until last call. The actual cost of the PPACA in the first year of its implementation is probably going to be around 80 billion dollars. According to Democratic cheerleaders, the Republicans are holding the
American people and government hostage to their ridiculous demands. According to conservative cheerleaders, this is all that separates the two parties on the Federal budget for fiscal 2014. 80 billion dollars out of a 3.6 trillion dollar budget, about 2.2%.

Surely 2.2% of Federal spending is not worth going to war over inside the Beltway. How could either Republicans or Democrats be so stupid as to hold the government hostage over such a paltry sum? They aren't. A look outside your window can give you confirmation that nothing has really changed, even as we head into day 10 of the "government shutdown".

The government shutdown hasn't seriously affected anybody who matters (if you're poor and on Federal assistance, it is troubling, but this is not a new state of affairs for the poor, the most readily exchanged chip on the political table). Some constituencies are affected at the margins but, all things considered, life goes on in the most prosperous country in the world.

Federal bean counters are ringing the alarm bells for October 17th, which is approximately the time when the US will hit the debt ceiling unless Congress raises it. At which point, the Treasury has about 30 billion dollars worth of money on hand to fund the government. The real date to watch is November 1st. That's when October's Social Security checks are due. If Congress can't reach a budget and debt ceiling deal by then, the single biggest line item in the Federal budget is Social Security. Payments will necessarily be halted or severely reduced.

That would create an uproar in the most powerful, most influential, and most motivated bloc of constituents in the United States. They will lift their geriatric fingers, dial their Representative's public line, and clog it with so much vitriol and disgust that even the most diehard conservative and liberal will have no choice but to raise the debt ceiling and call on the President to issue back payments.

But I think things will be resolved about 2 days after the October 17th soft deadline or even slightly before. This is a manufactured crisis in which everyone is culpable. Republicans, Democrats, journalists, the American public, everybody is to blame because everybody is content to let this thing play out as close to the hardest deadline as possible (November 1st) before properly conducting the business of the United States, which is to defend the country from foreign enemies and elements and dole out public money to favored constituencies.

Monday, October 7, 2013

Man, there were moments during this episode where I just wanted to turn it off. The panel wasn't that good. The mid-show interview guest was absolutely terrible. And the pre-panel interview guest was a mouthpiece for the Obama Administration. That being said, there are things that must be addressed.

Ezekiel Emanuel: We need to get buy in from younger people. And they will definitely consider a catastrophic insurance plan that's cheaper than their phone bill.

The figure that Dr. Emanuel kept trotting out, the $40-50/month plans, won't exist for the majority of young people. If they're living in higher cost areas like California, New York, New Jersey, there won't be any plan available for that amount of money. Because, as Dr. Emanuel admitted, younger people are going to be subsidizing older people under the new insurance plans.

I can't give out any figures right now, because the public healthcare exchanges website is an IT nightmare (otherwritershavealreadycoveredtherollout), but once they sort out the mess, I'll revisit this issue. As a healthy 25 year old in Georgia (a low cost state), I'm curious to see what the most basic health plan offered by the PPACA would cost me.

The best way to entice younger people to enroll for healthcare is to deregulate the insurance market and allow all out-of-pocket costs to be tax deductible. It would also be the most efficient way for insurers and providers to compete against each other, as more companies would simply elect to stop offering their own insurance plans and simply give employees raises.

Alan Grayson and Suzy Khimm: The shutdown is actually costing the government money. With the shutdown, the government can't collect revenues on fines and taxes.

This is an extremely misleading argument (that got big applause from the audience). The IRS is still out there collecting money on behalf of Uncle Sam. Income taxes, payroll taxes, excises and duties are still being collected. The only revenues that aren't being collected are fines and settlements made by the various alphabet agencies (EPA, FCC, SEC, FTC, etc) due to the furloughs of the regulatory inspectors. According to the White House budget, these revenues total to around 25 billion dollars per year, which is less than 1% of the amount that the government takes in via taxation and fines.

The suggestion that the shutdown is costing more money than the absence of a shutdown is ridiculous. Such rhetoric should have been called out by Matt Kibbe, the tea party conservative. But alas, it was not to be.

Bill Maher: Opinion polls are facts. Let's not argue about them.

Maher was making the point that Americans are against shutting down the government in order to delay the PPACA according to the results of a few polls. And he shut down Kibbe with the "we're dealing with facts".

Can we stop treating opinion polls as facts? Especially when it deals with (relatively) Byzantine inside-the-Beltway procedures? The American public likes the PPACA but dislikes Obamacare according to some recent polling. The fact is unless you're asking voters who they are voting for, opinion polling is the absolute worst thing to cite when it comes to what the American people want.

The American people don't know what they want. Individually, they want high paying jobs, a safe neighborhood to live in, emotionally fulfilling relationships, and the next iPhone. Their opinions on public policy are fickle, based on willful ignorance, and not worth considering.

What politicians already realize is that it's the hardcore that swings votes. The irate citizen who calls his/her representative to shout at them has 100x more effect than the results of public policy polling. The silent majority can be swung either way. But it's the fanatics and obsessives that push candidates over the top.

Bill Maher 2: Why can't we save money on Afghanistan? We still spend 100 billion dollars a year on it.

Short memories and bad rhetoric. Cutting off funding for our armed forces in the middle of an active combat zone is sheer stupidity and incredibly bad politics. We're already slated for complete withdrawal in 2014. It can't be done any faster than that.

Matt Kibbe: We should probably talk about why we're asking young people to subsidize the old with Obamacare.

This is the one huge issue that's being overlooked. According to Democratic/progressive politics, public policy should not have indigent constituencies subsidizing wealthier constituencies. Since young people are mostly indigent and older people are, almost without exception, wealthier, it should outrage Democrats that the PPACA is purposely designed to subsidize older people at the expense of younger people.

But wait, some might say, what about student loans? Those definitely subsidize younger people who couldn't otherwise afford to go to college. The problem with that is that the vast majority of that subsidy is actually being captured by the colleges themselves in the form of tuition hikes (and more generous financial aid packages, which vastly increases their ability to price discriminate).

The other person could then argue that there could be yet another government solution to the problem. But in the end, we get this regulatory morass where nobody can make heads or tales of the entire situation. It reminds me of an old interview with Clarence Thomas about the pernicious effects of government regulation, counter-regulation, and compensatory regulation:

Clarence Thomas leaps from his chair. He retrieves a wire coat hanger
from his closet for a demonstration -- the same demonstration he gives
his law clerks. He bends it and says: "How do you compensate? So, you
say well, deal with it. Bend this over here. Oh, wait a minute, bend it a
little bit there. And you're saying that it throws everything out of
whack. What do you do?"

He holds up a twisted wire, useless now for its original purpose and
the point is made. "If you notice sometimes I will write just to point
out that I think that we've gone down a track that's going to cause some
distortion, then it's quite precisely because of that. I don't do
things that I think are illegitimate in other areas, just to bend it
back to compensate for what's already happened."

Thursday, October 3, 2013

Currently I'm working on the Javascript needed to make my retirement calculator work. But in the meantime, here's a quick post.

This represents a drastic misrepresentation of the budget/debt ceiling crisis. The author is saying if the debt ceiling isn't extended and the US Treasury doesn't have the authorization to issue more debt, we'll default on our current debts. This is simply not true.

It's estimated that it'll cost just 223 billion dollars to service our debt. The Federal government can collect 2.7 trillion dollars, 12 times that amount, without needing to borrow a cent. If defaulting on our debt would be that harmful to the global economy, the US Treasury can simply...not default on the debt.